Jarrolt v. Moberly
103 U.S. 580 (1880)

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U.S. Supreme Court

Jarrolt v. Moberly, 103 U.S. 580 (1880)

Jarrolt v. Moberly

103 U.S. 580

Syllabus

1. The Act of the General Assembly of Missouri approved March 18, 1871, which provides that

"It shall be lawful for the council of any city, or the trustees of any incorporated town, to purchase lands, and to donate, lease, or sell the same to any railroad company upon such terms and conditions as such board may deem proper, and for the purposes of assisting and inducing such railroad company to locate and build machine shops or other improvements upon such lands, and, for such purposes to levy taxes upon the taxable property of such city or town, and to borrow money and to issue the bonds of such city or town for such purposes, provided a majority of the qualified voters of such town or city, at a special election to be held therein, shall assent to such purchase and donation"

is void, it being in conflict with sec. 14 of art. 11 of the constitution adopted in 1865, which declares that

"The general assembly shall not authorize any county, city, or town to become a stockholder in or to loan its credit to any company, association, or corporation, unless two-thirds of the qualified voters of such county, city, or town at a regular or special election to be held therein shall assent thereto."

2. The provision which prohibits the creation of an indebtedness by a direct loan of municipal credit does not permit the indirect use of such credit for the same purpose.

3. The Act of Feb. 16, 1872, forbidding, under certain penalties therein prescribed, the officers of a municipality in its behalf to loan the credit thereof, or donate to or subscribe stock in any railroad or other company, without the previous assent of two-thirds of the qualified voters, is merely prohibitory in its character, and confers no authority on those officers when such assent was given.

4. Held, therefore, that the bonds of the "municipal corporation of the inhabitants of the Town of Moberly," in the County of Randolph, in the State of Missouri, dated May 1, 1872, and reciting that they are

"issued in pursuance of an election held in said town on the twenty-sixth day of March, A.D. 1872, to decide whether said town should purchase and donate to the St. Louis, Kansas City, and Northern Railway Company two hundred acres of land for machine shop purposes, the result of said election being two hundred and twenty-eight votes for the purchase and donation and one vote against the purchase and donation, and, in pursuance to orders of the board of trustees of the inhabitants of the Town of Moberly, made on the eighteenth day of April, A.D. 1872, which orders were made in accordance with an Act of the General Assembly of the State of Missouri entitled 'An Act to authorize cities and towns to purchase lands, and to donate, lease, or sell the same to railroad companies,' approved March 18, A.D. 1870,"

are void.

The plaintiff is a citizen of the State of Illinois. The defendant

Page 103 U. S. 581

is the City of Moberly, a municipal corporation of the State of Missouri. This action was brought to recover judgment upon several interest coupons, originally annexed to, but now detached from, bonds issued by the city for the purchase of lands, consisting of two hundred acres, to be donated to the St. Louis, Kansas City, and Northern Railway Company, for "machine shop purposes." The petition -- which is the designation given to the first pleading in the action -- avers that on the 1st of May, 1872, the city issued fifty bonds, similar in form, differing only in their numbers, each for $500, to each of which twenty coupons were attached, each for the sum of $25, payable on the first day of November and of May of each year, and numbered from one to twenty; and it sets forth a copy of one of the bonds and coupons, as follows:

"Moberly Machine Shop Bonds"

"No. ___] UNITED STATES OF AMERICA [$500"

"Know all men by these presents, that the 'municipal corporation of the inhabitants of the Town of Moberly,' in the County of Randolph, in the State of Missouri, acknowledges itself indebted and firmly bound to W. F. Burrows or bearer in the sum of five hundred dollars, in current funds, which sum the said inhabitants of the Town of Moberly hereby promise to pay to the said W. F. Burrows or bearer, at the Bank of America, in the City of New York, ten years after the date of this bond, together with interest thereon from date at the rate of ten percent per annum, which interest shall be paid semiannually, in current funds, on the presentation and surrender at said bank of the annexed coupons as they severally become due and payable, but this bond is payable at the option of the said inhabitants of the Town of Moberly at any time after three years from the date hereof, and is payable only by a special tax on all the real estate and personal property lying and being within the corporate limits of said town."

"This bond is issued in pursuance of an election held in said town on the 26th day of March, A.D. 1872, to decide whether said town should purchase and donate to the St. Louis, Kansas City, and Northern Railway Company two hundred acres of land for machine shop purposes, the result of said election being two hundred and twenty-eight votes for the purchase and donation, and one vote against the purchase and donation;

Page 103 U. S. 582

and in pursuance to orders of the board of trustees of the inhabitants of the Town of Moberly, made on the eighteenth day of April, A.D. 1872, which orders were made in accordance with an act of the General Assembly of the State of Missouri, entitled 'An Act to authorize cities and towns to purchase lands and to donate, lease, or sell the same to railroad companies,' approved March 18th, A.D. 1871."

"In witness whereof, the said inhabitants of the Town of Moberly have executed this bond, by the chairman of the board of trustees of said town signing his name thereto, and by the clerk of said board of trustees, by order of said board, attesting the same and affixing thereto his signature and the seal of said corporation, in the Town of Moberly, County of Randolph, State of Missouri, on the first day of May, 1872."

"J. B. FREEMAN"

"Chairman of the Board of Trustees of the"

"Inhabitants of the Town of Moberly"

"ATTEST:"

"[SEAL] J. W. DORSEY, Clerk"

"Coupon No. 1"

"$25] MOBERLY, RANDOLPH COUNTY, MISSOURI [$25"

"The municipal corporation of the inhabitants of the Town of Moberly will pay the bearer, at the Bank of America, in the City of New York, twenty-five dollars, on the first day of May, 1872, being six months' interest on bond No. ___, for $500.00."

"J. W. DORSEY, Clerk"

The petition also avers that the plaintiff is the holder of coupons amounting to $4,200, originally annexed to these bonds, but now detached from them, which are due and unpaid, for which sum he asks judgment. To the petition the defendant demurred, on the ground, among other things, that the act of the legislature under which the bonds were issued is in conflict with the constitution of the state, and that the petition does not state facts sufficient to constitute a cause of action. The court sustained the demurrer, and the plaintiff electing to stand upon his petition, final judgment was entered thereon for the defendant.

The judges, however, were divided in opinion upon the questions raised by the demurrer, and, in accordance with the

Page 103 U. S. 583

statute, have certified, for the decision of this Court, the following points upon which they differed, namely:

First, whether the act of March 18, 1870, entitled "An Act to authorize cities and towns to purchase lands, and donate, lease, or sell the same to railroad companies," recited in the bonds, is in conflict with sec. 14 of art. 11 of the Constitution of Missouri.

Second, whether the petition states a valid and sufficient cause of action.

The Act of March 18, 1870, under which the bonds were issued, declares that

"It shall be lawful for the council of any city, or the trustees of any incorporated town, to purchase lands, and to donate, lease, or sell the same to any railroad company, upon such terms and conditions as such board may deem proper, and for the purposes of assisting and inducing such railroad company to locate and build machine shops or other improvements upon such lands; and for such purposes to levy taxes upon the taxable property of such city or town, and to borrow money and to issue the bonds of such city or town for such purposes, provided a majority of the qualified voters of such town or city, at a special election to be held therein, shall assent to such purchase and donation."

Sec. 14 of art. 11 of the Constitution of Missouri of 1865, with which it was contended the act conflicted, declares that

"The General Assembly shall not authorize any county, city, or town to become a stockholder in, or to loan its credit to, any company, association, or corporation, unless two-thirds of the qualified voters of such county, city, or town, at a regular or special election to be held therein, shall assent thereto."

To meet the objections to the alleged invalidity of the bonds, the plaintiff cited the Act of the legislature of Feb. 16, 1872, entitled

"An Act to protect counties, cities, and incorporated towns from combinations between railroad companies, county courts, city councils of cities, and boards of trustees of incorporated towns,"

the first section of which declares that

"No county court of any county, city council of any city, nor any board of trustees of any incorporated town, shall hereafter have the right to donate, take, or subscribe stock for such county,

Page 103 U. S. 584

city, or incorporated town, in, or loan the credit thereof to, any railroad company, or other company, corporation, or association unless authorized to do so by a vote of two-thirds of the qualified voters of such county, city, or incorporated town. And any justice of a county court, member of a city council, or member of a board of trustees of any incorporated town, who shall hereafter vote to donate, take, or subscribe stock for such county, city, or incorporated town, in, or loan the credit thereof to, any railroad company, or other company, corporation, or association, unless authorized to do so by a vote of two-thirds of the qualified voters of such county, city, or incorporated town, shall be adjudged guilty of a felony, and on conviction thereof shall be punished by imprisonment in the penitentiary for not less than two years."

Other sections repeal all acts or parts of acts inconsistent with it. The act took effect on its passage. On the 29th of March, 1872, the legislature passed another act, in terms amending the first section of the act of March 18, 1870, so as to read as follows:

"It shall be lawful for the council of any city, or the trustees of any incorporated town, to purchase land, and to donate, lease, or sell the same to any railroad company, and to contract, for a period of time not exceeding twenty years, with such railroad company, for the payment of all or any part of the taxes which may at any time be levied by the authorities of such town or city, and for such town or city purposes only, upon property of such railroad company, and upon such terms and conditions as such board of said city or town may deem proper, for the purpose of assisting and inducing said railroad company to locate and build machine, work, or other shops, or other improvements, upon such land for the purpose of such purchase, to levy taxes upon the taxable property of such city or town, and to borrow money and issue the bonds of such city or town for such purpose, provided that two-thirds of the qualified voters of such town or city, at a regular or special election to be held therein, shall assent to such purchase or donation."

This act took effect on its passage.

Page 103 U. S. 585

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